Interest Rate Buydown Plan
Fannie Mae
Updated 10-31-2026
Interest Rate Buydown Plan
An arrangement wherein the property seller or any other party deposits money to an account so that it can be released each month to reduce the borrower's payments during the early years of a mortgage. During the specified period, the borrower's effective interest rate is "bought down" below the actual mortgage interest rate.
Fannie Mae Glossary of Terms
Fannie Mae · p. 24
California Association of Realtors
Updated 10-31-2026
Interest Rate Buydown Plan
An arrangement that allows the property seller to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage.
California Association of Realtors Glossary
California Association of Realtors · p. 7
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